Concern about the health of Apple's co-founder and chief executive has reportedly been one factor damaging stock prices. (Source: Cupertino City Council)

Concerns about overvaluation, succession are top on investors' list

By market
cap Apple Inc. (AAPL)
is the world's biggest tech company, having recently passed Microsoft Corp. (MSFT) for
that spot. Apple also recently passed Microsoft in quarterly profits.
And the company blows past analyst estimates virtually every single quarter. Still, all
is not well for Apple in investors' eyes.

Apple stock hit a high of $364.90 in February 2011, and has since churned,
cycling up and down. But since the start of June there's been consistent
downward momentum, which has dropped the stock to well below its cyclic lows, plunging
it to $315.32 USD a share at the bell on Monday, June 20.

Most analysts attribute that 15.7 percent drop to uncertainty about the
succession plan for Apple, after the departure of chief executive Steve Jobs.
Mr. Jobs, who co-founded Apple in 1976, returned to the company in 1997
and transformed it from a struggling boutique vendor to the world's largest
gadget maker.

In a way, the situation Apple finds itself in is akin to an
impending CEO retirement--without a successor having been named. In such
"lame duck" periods, companies can become paralyzed, as managers
focus more on their own future and political stature and uncertainty and less
on the business.

And, in Apple's case, unfortunately, the situation is even worse: No one knows
whether Steve will return, or when, or even when the question of his return
will finally be put to rest. So the company is in a sort of perpetual
purgatory.

The
source of Apple's stock drop may also be of a more technical nature. In
terms of price-per-earnings ratio, the stock is somewhat overvalued at a P/E
ratio of 15.0 (by contrast Microsoft has a 9.7. P/E ratio isn't always
the best judge of performance, but some fear that Apple's stock has risen too
far, too fast.

Additionally, some believe the
options markets are dragging the stock down as trading was flat for much of
last week until Thursday-Friday. However, a 1.5 percent drop on Monday
dispels that theory somewhat.

Some investors still stand firmly behind Apple. Andy Zaky of the Bullish
Cross says that Apple stock will likely reach $500 USD/share, so is a great buy
at $300-$320 USD/share. He writes:

Because of the market's short-term blindness to this obvious
reality, we find it prudent to put a strong-buy rating on the stock if it so
happens to trade under $300 during a potential brutal summer correction.

So basically you're saying that Android caters to all users, whereas IOS caters to those that have disposable incomes? More or less, yes, that's what you just said. Guess what? People don't have as much disposable income. And guess what else? Not all phones are heavily subsidized by carriers. In fact, the most popular phones are the same price as the Iphone.

100 million IOS devices, 100 million Android devices, all made by various manufacturers aimed at different demographics. Guess what? IOS is not the 'one size fits all' that Apple makes it out to be. And some of those 'dumb old e-readers' don't count towards Android devices. Have you even bothered to look at the metrics? If it can't run market apps, it's not a device that gets noticed.

You seem to misunderstand the concept of devices. Android has many manufacturer's selling devices. Apple has 1. Combine Android devices sold to IOS and you might actually be surprised. For instance, I know the Asus Transformer has been selling >100k per month right now alone. Combine it with the other various tablets, guess what? You've got your 'millions' of devices being sold a month.

The sky is receding for Apple, much like Steve Job's hair line and lifeline. Soon enough it will end, and it will be sad since he is a genius, that doesn't mean he isn't a tyrant and terrible to his peons (I mean, customers).

And btw, Honeycomb is great. Take more than 5 minutes to evaluate it (ie use it for a number of hours). You might actually find out it's nice. Or you'll just say it sucks and put it down after 5 minutes cause it doesn't have the Apple logo on the back. Guess what? It just cost you $300 more than my tablet to get it. And it's worse than my tablet. Go figure.